So far Microsoft has announced 48 Operator Connect partners and that number is sure to continue to rise. On the face of it, it’s a no-brainer for an Operator to jump on the bandwagon, in fact, many Operators are too fearful they will be noticed more for their absence than participation so they feel they’ve no choice but to join the club. But at what cost and does the business case actually stack up?
The cost to be an Operator Connect partner
The 2 variables, like most things in life, boil down to time and money. It’s not an insignificant undertaking to get on the program due to its strict technical requirements and I’ve heard figures bounded around that end to end, with a level of automation built in so customers can purchase through a digital journey, could well cost the Operator in the region of £500,000 before on-going operational costs. And what about the other variable time, it’s not inconceivable for the project to take 18 months; GULP.
There are 2 main ways to gain accreditation, being the Operator working directly with Microsoft or using an Accelerator partner. The latter helps the inexperienced on their way, but it will again come with some significant set-up costs plus an ongoing per-user per-month fee, call it a royalty on everything they sell. The challenge then for the Operator is much like Kevin Costner’s one in Field of Dreams, if we build it will they come? There is a lot of blind faith involved. And if they do come will they come in enough volume and a price level to get a return on the investment?
Competitive landscape and market size?
Now comes a dose of reality. Recent figures show that Microsoft Teams PSTN calling was running at around 12 million active users. Given all the noise and buzz around it, it’s actually surprisingly small, especially considering there are around 100 million users with the necessary Microsoft licensing, it’s just the adoption part that’s missing. Then consider the 12 million active number is broken down even further with circa 9 million users enabled via direct routing, 1.5 million via calling plans, and the balance being via Operator Connect. Current forecasts from analysts do however predict that much of the growth will be delivered via OC going forward. By 2026 predictions currently expect Phone system adoption is set to rise to 35 million users. So it’s a fair assumption that the global market up for grabs should be around 20 million seats over the next 3 years (split between calling plans, direct routing, Operator Connect, and OC Mobile).
Now there’s the race to the bottom to consider. Microsoft recently launched a PAYG offer which baselines at £1.51 pupm in the UK, this includes a phone number and unlimited inbound minutes, and a rate card for outbound. For businesses that don’t make many calls, it’s a compelling offer. So this could be viewed as the benchmark from a commercial standpoint. It’s not inconceivable that an Operators cost to deliver an Operator Connect service could well be around this figure, so what’s left in this sense of the commercial opportunity? Answer – adding calling minutes and bundles. But then we have the question that many Operators dare to ask or even think about, will users actually make calls given so much traffic is now on-net? How often will users dial an actual phone number?
So where is the opportunity?
The question to answer is why out of 100 million users only 12 million have flicked the switch to adopt PSTN voice. I would suggest the barrier for most is complexity. For many businesses it must be daunting to look to migrate complex telephony environments to Microsoft Teams, they may well have multiple carrier interconnects across the globe, contact centres, on-premise PBX telephony that they want to keep, DECT systems, old analogue devices, the list goes on. Operator Connect is a great solution to bring dial tone using your chosen carrier to Teams users, but as a tool to deliver a complex large enterprise migration, it lacks the necessary flexibility and agility. So as I see it the real opportunity is one of tapping into solving the adoption issue, providing dial tone alone will simply be a price and coverage discussion where the masses will fight it out.
Is there an alternative to Operator Connect?
Most operators that are serious about the Microsoft opportunity already have an alternative, direct routing. Most likely they purchased certified SBC’s from the likes of AudioCodes or Ribbon and created a service offer. The part that was in many cases missing was the automation, the element that a proper Operator Connect implementation delivers, as well as the tight integration with the Teams Admin Centre TAC (so the admin had the choice to do the MACD’s in either the TAC or the SP’s portal). All this means phone system adoption becomes a significant project with expensive professional services (in other words Capex and time which in today’s market isn’t what an IT manager wants to hear). So looks like we are back to square one, just how do you unstick the circa 90 million Teams users that are all licensed up and ready to go? In gold mining terminology, figure this out and it’s like finding the motherlode.
Welcome to Callroute
As Steve Jobs famously said, “You have to start with the customer experience and work backward to the technology„. Not bad advice, so what we’ve built at Callroute is all about addressing the barrier complexity to solve the adoption problem.
Callroute enables enterprises to quickly and easily connect their chosen carriers and traditional on-prem complexity into a global cloud, mesh it all together, and manage it daily through an intuitive web portal. For the carriers; through a simple verification process, they can be added to the Callroute carrier library thus enabling them to offer a Microsoft Teams voice service without the barriers of time and commercial investment. They also benefit from the added feature set vs Operator Connect; more details can be found here.
And the downside to all this from the carrier perspective? Well, they don’t get their logo in the Teams admins centre. Hmmm, that’s not for me to judge and I’m sure the masses will continue to flock to join the club. But there is another way; the Callroute way. 🙂